Lionel Smith

Commercial trusts in European private law

This book examines the law governing asset management in a wide range of commercial contexts across 15 jurisdictions of the European Union. The study includes the basic features of the available legal institutions (for example, whether they provide bankruptcy protection or allow free choice of governing law) and specialized applications in particular fields (such as pensions and collective investment schemes). Produced with a team of over 20 contributors, it is the latest volume to appear from the Trent-based project The Common Core of European Private Law. The volume begins with a study of the history of comparative law scholarship in the field of trusts, situating the current work in the field and addressing the thorny issue of terminology. The comparative data are structured, according to the Common Core methodology, around hypothetical questions and responses from national reporters. The authors present comparative conclusions regarding the reports and a discussion of the issues raised for further study. The volume also includes an essay by Donovan Waters QC on the Hague Convention on the Law Applicable to Trusts and on their Recognition.

The Worlds of the Trust

Despite the common belief that they are found only in the common law tradition, trusts have long been known in certain mixed jurisdictions that have a civilian law of property. Trusts have now been introduced by legislation in a number of civilian jurisdictions, such as France and China. Other recent developments include the reception of foreign trusts through private international law in Italy and Switzerland and the inclusion of a chapter on trusts in Europes Draft Common Frame of Reference. As a result, there is a growing interest in the ways in which the trust can be accommodated in civil law systems. This collection of 22 essays explores this question, as well as general issues such as the juridical nature of the trust, the role and qualifications of the trustee and particular developments in specific jurisdictions.The collection grows out out of an international conference held in 2010 by the Paul-Andre Crepeau Centre for Private and Comparative Law. It is the latest fruit of a substantial research project on the comparative law of trusts, which also includes L. Smith (ed.), Re-imagining the Trust: Trusts in Civil Law (Cambridge University Press, 2012), and a forthcoming special issue of the McGill Law Journal (volume 58, no. 4, 2013).

Tracing into the Payment of a Debt

A plaintiff who is deprived of a thing might seek out that very thing in order to assert his rights. The victim of a car thief tries to find the car. This is a natural response to such a misfortune, although it is not necessarily a fruitful one. Alternatively, the plaintiff might find that the original thing has been used to acquire some new asset: for example, the thief has swapped the car for a motorcycle. In that case, especially if for some reason the plaintiff will be unlikely or unable to establish a claim in relation to the car, the plaintiff might choose to assert a claim in relation to the motorcycle.

Law and the New Logics

Introduction In his LEGAL TRADITIONS OF THE WORLD (Glenn 2010), Patrick Glenn observes that the world contains many different legal traditions, often inconsistent with each other, and that even a single tradition can contain different sub-traditions that may be inconsistent with each other. Moreover, he notes that these traditions may interact with each other in complex ways. In chapter 10, Glenn raises the question of how to account for this from the perspective of formal logic. In chapter 14 of his THE COSMOPOLITAN STATE (Glenn 2013) he writes that new logics may be needed that are multivalent, paraconsistent or non-monotonic and do not adhere to the classic rules of non-contradiction and the excluded middle. In this chapter I will explore the use of one such new kind of logic, namely, logics of argumentation. It will turn out that such logics offer what Patrick Glenn is asking for without giving up classical two-valued logic. Instead, classical logic is in argumentation logics embedded in a larger formal framework, and it is this larger framework that has the desired nonstandard behavior. Thus argumentation logics provide a way to cope with inconsistent legal traditions without having to give up two-valued logic, a way that is moreover arguably close to the way lawyers think since notions like argument, counterargument and rebuttal are natural them. Introductory textbooks to logic often portray logically valid inference as ‘foolproof’ reasoning: an argument is deductively valid if the truth of its premises guarantees the truth of its conclusion. In other words, if one accepts all premises of a deductively valid argument, then one also has to accept its conclusion, no matter what. However, we all construct arguments from time to time that are not foolproof in this sense but that merely make their conclusion plausible when their premises are true. For example, if we are told that John and Mary are married and that John lives in Amsterdam, we conclude that Mary will live in Amsterdam as well, since we know that usually married people live where their spouses live. Sometimes such arguments are overturned by counterarguments. For example, if we are told that Mary lives in Rome to work at the foreign offices of her company for two years, we have to retract our previous conclusion that she lives in Amsterdam.

Massively Discretionary Trusts

Trust drafting practices have changed dramatically in recent decades. A range of considerations has led to an increase in the dispositive discretions held by trustees. In some cases, the trustees’ dispositive discretions effectively govern the whole trust structure, leading to what the author calls a ‘massively discretionary trust’. These trusts create a series of legal risks. These include the possibility that the trust property is held on resulting trust from the moment of the trust’s constitution and the possibility that the beneficiaries can collapse the trust and take the trust property. Some drafting techniques may be based on a misunderstanding of the law; some may invite litigation; and the governing legal principles, as understood by some drafters, may be subject to revision and refinement by the courts. This paper will examine some of these possibilities using concrete examples.

Canada: The Rise of Judgments with Suspended Effect

In principle, all court orders in Canada have retroactive effect. However, the Supreme Court of Canada, proceeding pragmatically, has decided that it has the power to depart from this when it deems it appropriate to do so. Such occasions have arisen in relation to declarations of constitutional invalidity. Rarely, the Court has made orders that operate only prospectively. More commonly, indeed one might say quite routinely, it makes orders whose effect is suspended for a defined period. When the period expires, the order is retroactive, but the suspension allows the legislature to intervene and react to the court order with new legislation, before the order takes effect. The basis for such orders is contested by some.

Disgorgement of Profits in Canada

Canadian law sometimes allows gain-based remedies for certain wrongful acts. There is a strong suggestion that gain-based remedies are available in the common law provinces for torts and perhaps breaches of contract, but the courts have been hesitant. Common law provinces have also been willing to award gain-based remedies for breaches of confidence, in the court’s discretion. In the context of infringements of intellectual property rights, which is federal law, the legislation makes clear that gain-based remedies are available, although again this is in the discretion of the court. In both common law and Quebec civil law, in situations where one person is managing the property or affairs of another in a fiduciary capacity, improper gains must be surrendered, although it is arguable that the law ascribes rights acquired by the manager to the principal as the correct legal implementation of the parties’ relationship, rather than as a remedy for wrongdoing.

Peter Birks and Comparative Law

This paper was presented to the 50th Anniversary Conference of the Quebec Association of Comparative Law at the Faculte de droit, Universite de Sherbrooke, in October 2011, within the conference theme “The jurists who have shaped comparative law: their dreams, works, successes and failures.” It studies aspects of the thought of Peter Birks in relation to comparative law, Roman law, legal scholarship and legal education. Birks valued comparative law, and thought that it could be more thoroughly integrated into research and teaching in law. About Roman law, however, he was passionate. He viewed it as a fascinating object of study and reflection, and as an essential part of undergraduate legal education. He deprecated the decline of Roman law as part of the law school curriculum. In this paper, I suggest that one reaction to the decline of Roman law in legal education could be a more comprehensive embrace of comparative law. If comparative law were integrated carefully into the curriculum, it could bring to students all of the benefits that Birks found in the study of Roman law.

Constructive Trusts and the No-Profit Rule

This case note criticizes the decision of the Court of Appeal for England and Wales in FHR European Ventures LLP v Mankarious [2013] EWCA Civ 17 and argues for a new understanding of the no-profit rule in fiduciary law. The note was cited in the decision of the UK Supreme Court when it allowed the appeal.

The Re-Imagined Trust

This is the editors conclusion to a collection of six texts on trusts in civilian and mixed jurisdictions, arising out of a series of Civil Law Workshops held at the Quebec Research Centre of Private and Comparative Law during 2008-9.